Indicators
MACD indicator
The difference between a 12 and a 26-period EMA, with a 9-period signal line. Crosses and the zero line show changes in momentum.
Why it works
It combines trend and momentum in one view. A MACD cross in the direction of the trend often confirms a pullback has ended.
How to use it
In an uptrend, look for the MACD line crossing above its signal line after a pullback, ideally near or above zero.
The typical mistake
Taking every MACD cross as an entry: it lags, so in ranges it gives late and false signals.
FAQ
What is MACD in trading?
The difference between a 12 and a 26-period EMA, with a 9-period signal line. Crosses and the zero line show changes in momentum.
How do you trade MACD?
In an uptrend, look for the MACD line crossing above its signal line after a pullback, ideally near or above zero.